Depression in the context of Alzheimer's disease (AD) is a significant public health problem with serious adverse consequences for patients and their caregivers. There has been little research into the course or treatment of depression associated with AD. This is in part due to the absence of validated operational criteria for defining depression in AD. Recently, NIMH convened an expert consensus panel to develop draft criteria for depression of Alzheimer's disease (dAD) and to establish research priorities in this area. These criteria are intended to facilitate further studies of the course and treatment of depression in AD. The first aim of the proposed multicenter study is to determine whether individuals with dAD respond to antidepressant treatment using the medication sertraline in a 12-week randomized, controlled, double blind trial. The second aim is to establish whether earlier treatment of depression in AD affects critical non-mood outcomes such as cognition, quality of life, activities of daily living and caregiver variables, over 24 weeks. The third aim is to validate the dAD syndrome by evaluating its course and response to treatment in comparison to other diagnostic conceptualizations of depression in AD, over six months. These aims are consistent with priorities articulated by the NIMH expert consensus panel. 130 patients meeting criteria for dAD, and their caregivers, will be recruited into the study at five clinical centers: Johns Hopkins, University of Southern California, University of Rochester, University of Pennsylvania, and Medical University of South Carolina. The study will be coordinated by the Johns Hopkins Center for Clinical Trials. After detailed baseline characterization participants will be randomized to treatment with sertraline or placebo for at least twelve weeks and followed for up to 24 weeks. All patients and caregivers will receive psychosocial interventions for Alzheimer's and depression. Patient outcomes will include: global improvement of the depressive disturbance, ratings on a depression scale, quality of life, cognitive functioning, activities of daily living, behavioral disturbance, and adverse events. Caregiver outcomes will include: depression, quality of life, and care giving burden. Regarding the first study aim, analyses will compare the two treatment groups on patient mood outcomes in the first twelve weeks. Regarding the second study aim, analyses will compare the two treatment groups on the trajectories of patient critical AD patient outcomes (cognition, functioning, quality of life, behavior) and of caregiver outcomes over 24 weeks. Regarding the third aim, analyses will examine the longitudinal course of depressive symptoms and of depressive syndromes in the context of Alzheimer's using three different syndromic definitions: dAD, DSM-IV, and "Alzheimer's Associated Affective disorder" derived empirically. The predictive validity of defining depression in AD using a symptom scale or each of these syndromes will be assessed longitudinally against the various study outcomes, and against efficacy of response to anti-depressant treatment.